Representing material stocks and flows for machinery and equipment in scenario models capturing circular economy and resource efficiency opportunities

Industrial production is built on machinery and equipment capital, which comprises the vast range of tools essential to many industries. As automation and robotics accelerate, service sectors also rely more on machinery. Meanwhile, the shift toward sustainable energy systems and circular economies highlights the importance of machinery that includes wind turbines, batteries, and waste-sorting robots. Using input–output analysis, we found that one-third of the world’s metal production is used for machinery and equipment, contributing to 5% of global greenhouse gas emissions. Our empirical analysis has examined the material and carbon footprints of machinery capital, yet we still lack a clear understanding of how much machinery will be needed in the future and the resulting material and carbon implications. Important demand drivers are the industrialization of developing countries, which today exhibit much lower machinery stocks than industrialized countries, beginning automation in the service sectors, and the needs of the energy transition.

In the pursuit of a climate-neutral society, machinery production merits careful attention due to its dual role. While it serves as a key enabler of technological transitions, producing and operating machinery can also result in significant environmental impacts.

To address these concerns, we developed a scenario-based model that explores machinery’s future material and carbon impacts, supported by the Circular Economy Modelling for Climate Change Mitigation (CircoMod) project. This approach provides a common framework for integrating existing Integrated Assessment Models (IAMs) with NTNU’s forward-looking multi-regional input–output (MRIO) scenarios, EXIOFUTURE. Our work applies existing shared socio-economic pathway (SSP) scenarios and a CircoMod baseline, integrating transformative change and capital dynamics in the industrial sector. Through this modeling, we aim to better identify circular economy and climate mitigation solutions for society’s most significant uses of metals, machinery, and equipment, and to build stronger material demand scenarios. Although still in the early stages, our findings shed light on how machinery production might evolve to support a more sustainable and climate-neutral future.